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Operating Gains Offset Losses.(Brief Article)(Statistical Data Included)
Not surprisingly, servicing costs rose last year as lenders struggled to manage the portfolio churning associated with the largest refinancing wave in history. But at the same time, operating profits apparently improved for servicers.
A recent study by the Mortgage Bankers Association of America shows that servicers actually made some operational gains despite heavy portfolio churning last year.
Net operating income from loan servicing, which excludes indirect costs, hedging, impairment and amortization, actually increased last year to $369 per loan, up from $299 in 2000.
The growth in operating income was fueled by an increase in per-loan servicing fees due to larger balance loans. Also, increases in escrow earnings and ancillary income, such as late fees, contributed to the rise in operating income.
The study also suggests that mega-lenders do not have a monopoly on successful loan administration.
"We had top performers in every peer group category of our study, regardless of size," said Marina Walsh, a financial analyst with the MBA.
But the extent of damage done by amortization and impairment is striking, according to the MBA's recent Cost of Servicing Study.
- The 2005 Cost of Servicing Study: with fewer new loans flooding into portfolios...
- Magazine article from: Mortgage Banking Walsh, Marina September 1, 2005 700+ words
...Association (MBA) Cost of Servicing Study (COSS), servicers...2004, due to fewer loan setups and payoffs...serviced 30.9 million loans for a total mortgage...1 trillion. The loan composition of the...conventional conforming loans; 15.3 percent...1 percent other loan types. ...
- Servicing study shows strong 2005 results: servicers returned to financial...
- Magazine article from: Mortgage Banking Walsh, Marina September 1, 2006 700+ words
...of the Cost of Servicing Study (COSS) in 1999...direct expense per loan was at its lowest...as the Cost of Servicing Study. The change...3.6 million loans serviced. A...percent to $69 per loan, while productivity...percent to 1,455 loans serviced per...
- Servicing costs up in 2001 refi surge. (Servicing).(annual cost of servicing...
- Magazine article from: Mortgage Banking Walsh, Marina September 1, 2002 700+ words
...latest annual cost of servicing study published by the...helped by larger loans with bigger servicing...waves of payoffs and loan setups tested servicing...Annual MBA Cost of Servicing Study (COSS). Since...on the number of loans serviced. In addition...
- Assessing Servicing Performance.(Mortgage Bankers Association of America Cost...
- Magazine article from: Mortgage Banking DUNCAN, DOUGH ROWAN, TIFFANY February 1, 2000 700+ words
...America's (MBA's) Cost of Servicing Study (COSS) now provides such...effects of composition of loans serviced, company size...evolution of the study The Cost of Servicing Study was created to provide servicing...servicers didn't even have 17 loan administration employees...
- The cost of servicing in 2003: total direct servicing expenses rose last year...
- Magazine article from: Mortgage Banking Ballesteros, Rita Walsh, Marina September 1, 2004 700+ words
...fees based on higher loan balances, servicing...servicing costs per loan, however, also...latest annual Cost of Servicing Study (COSS), now in...on the number of loans serviced. Although...grew to 818, 249 loans in 2003 from 380...1999. Increases in loan balances and churn...
- BNY Mellon Asset Servicing Study Highlights Shifts in Securities Lending Model...
- Newspaper article from: U.S. Newswire August 11, 2009 700+ words
...portfolio diversification but has heightened concerns around loan pricing. While most institutions have already migrated towards...standard, this model produces returns based upon the securities loan itself, with little incremental benefit from collateral reinvestments...
- BNY Mellon Asset Servicing Study Highlights Shifts in Securities Lending Model...
- Press release article from: PR Newswire August 11, 2009 700+ words
...portfolio diversification but has heightened concerns around loan pricing. While most institutions have already migrated towards...standard, this model produces returns based upon the securities loan itself, with little incremental benefit from collateral reinvestments...
- SNAPSHOT: MBA COST OF SERVICING STUDY.(Mortgage Bankers Association of...
- Magazine article from: Mortgage Servicing News November 1, 2000 700+ words
...225 billion Aggregate volume of participants: $1.3 trillion Average number of loans serviced per employee: 1,119 Average direct servicing cost per loan: $71 Source: Mortgage Bankers Association of America Copyright c 2000 Thomson Financial...